7 Tips to Reduce Your Product Liability Risks


There are several things that you can do to reduce product liability risks before bringing a product to market.

In this article, we will discuss 7 tips on how to reduce your product liability risks in order to protect your company from lawsuits down the road!

Product liability risks are a reality for product manufacturers, retailers and distributors. These product liability risks can be reduced by following a few simple steps to make sure that you are not liable for injuries caused by your product.

Consumers feel strongly that the products they purchase and use should be both safe and reliable.  Accordingly, business owners need to take measures to decrease risk of having any issues with products being used improperly by customers and as well as precautions before selling said items.  Doing so will help reduce their product liability exposure.

Product liability claims can make a business close. If someone has been hurt very badly from a product that was found to be defective or dangerous, damages can be awarded in these claims.

By making sure everything is up-to-par when it comes down on both sides (manufacturer/seller) you’ll have much less worry about your reputation taking damage should anything happen from an issue stemming back from either side’s negligence; this could lead not only into lawsuits but also lost profits due solely because someone was injured using one.

If you are a product retailer, distributor, manufacturer or an importer, you will need to take extra steps for safety.
This includes meeting and going above the federal safety laws.

Product liability insurance is necessary for any business that manufactures or sells product.  If the product you sell accidently causes any type of bodily injury or property damage to a consumer, a product liability insurance policy would cover your small business in the event of a claim or lawsuit.

Product liability covers all product-related claims, including product defect, design flaw, manufacturing error and failure to warn.  Whether you are manufacturing or selling children’s products, food or electronics, the safety of your product is important to customers and retailers alike.

You may not know it, but product liability risks are everywhere. They can exist in any product that you create or sell. The best way to avoid product liability is simple: don’t make unsafe products! However, if you’ve already released a product and there’s a problem with it, then you need to be aware of the possible consequences of product liability.

From recalling your item to paying for damages – these are all outcomes that could happen when dealing with product liability.

Why Do Product Liability Suits Occur?

Product liability suits are often filed because of a defective product. The most common reasons for this are faulty design, manufacturing errors, improper labeling, or lack of safety warnings. These lawsuits can be costly and difficult to win if the defendant has provided adequate warning labels or proper instructions on how to use the product safely.

Manufacturers have a duty to provide safe products and take reasonable steps to warn consumers about any risks associated with their products. Retailers also have a duty not to sell defective goods that they know are dangerous and will cause injuries if used as intended.

3 Types of Products Claims a Company May Face

  • Production or Manufacturing  Flaws – These are claims where the blame is on the product production process causing an unsafe defect in product being used by a consumer.
  • Product Design Defect – A product design defect claim is where the product design is  claimed to be inherently unsafe.
  • Defective Product Warnings or Instructions – This type of claim is that the product produced had insufficient warnings or was not labeled properly or  for the consumer to understand the risk.

What product liability risks are you exposed to as a business owner?

One way to safeguard your bottom line and reduce your product liability risks is setting up systems that can anticipate and prevent potential product defects in the design and manufacturing process.

Product Safety Reviews

In order to release a quality product, it is important for the team responsible to review all safety and design-related aspects of their work before releasing anything. This includes reviewing any potential risks or hazards that may exist in this type of environment beforehand.  If a product is found to have a defect or issue, you have a legal obligation to immediately report this to the U.S. Consumer Product Safety Commission.

Product Instructions And Warning Labels

Keep your customers safe by providing up-to-date and accurate product labels. Product manufacturers must provide product usage warnings that cover every conceivable risk, so buyers know how to use the product safely.  The instructions for using a device should be written in clear language and fonts of sufficient size as well.

Document with detail

Always use tracking and product inventory systems to identify where in the product process a defect may have occurred. When it comes to product liability, your business needs a document control program.

It’s not just about being prepared in the event of litigation but also proving that you take safety seriously and are on top of any potential hazards or recalls before they happen. Your company has everything from design to production documents-don’t leave them all scattered around!

Practice Quality Control

Extend quality control measures to all phases of design, and manufacturing process.

Quality control is the backbone of any production process, and with an ever-increasing demand for high quality standards in today’s marketplace it has never been more important.

Ensuring that every product meets these expectations can be difficult without a team dedicated to performing checks throughout each phase but there are many steps you can take as an individual business owner or department head to ensure your products always meet customers’ needs.

This also provides assurance against faulty goods by allowing manufacturers like yourself to check products at each stage from start through shipment so they don’t make their way into customer hands until they get checked off all the boxes!

The best thing about this type of oversight? It doesn’t require huge investments on behalf of small businesses looking for ways how cut corners

Ensure Compliance

Make sure that your products satisfy all applicable codes, standards and product regulations. The safety and environmental obligations of the supply chain do not just apply to importers. Distributors and retailers as well have been impacted by these regulations in recent years which are being enforced more stringently than ever before.

Product compliance is an essential factor when designing products. There are safety, standard legislation, regulations governing chemicals and hazardous substances as well as environmental legislations that must be respected in order to make sure the product will not harm those who use it or animals living around where they might end up after disposal.

Prepare for Product Recalls

Develop a plan that prepares your business to deal with a product recall. Recalls are always a scary time for any business. Product recalls are often issued when a product poses an immediate danger such as defective manufacturing, design or production of the product.

It is terrifying to have to recall products, but it also means that you care about your customers and want their safety to be priority number one.

Product recalls can happen for various reasons such as faulty manufacturing or defective materials. Product safety is the number one priority, and getting your customers’ trust back is essential. Product recalls can happen at any time, so it’s important to be prepared.

Acquire Insurance

Acquiring product liability risk protection insurance which comes in a variety of forms: bodily injury coverage, property damage coverage, and financial losses caused by your products.  Protect your business with adequate product liability insurance coverage. Product liability insurance is important for all businesses who sell products, but these steps you can take to mitigate the risk of claims.

Recent Posts


Helpful Related Insurance Terms